News & Events

Gary, thanks for that thorough assessment of where the nuclear industry stands today and a look at some of the issues that are critical to our industry’s success.

As Gary said, it is clear that we are in a very different economic and political environment than we were at this time a year ago. We have a new administration in Washington, a larger Democratic majority in the U.S. House and Senate and notable changes in congressional leadership positions.

As we are meeting today, the Congress is continuing work on comprehensive energy and climate change bills. Clearly, nuclear energy has a role to play in both bills.

This is a more vigorous dialogue of energy policy issues broadly—and nuclear energy specifically—than we’ve had in many years. Outside the beltway, state legislatures throughout the Southeast and in states such as Ohio, Illinois, Minnesota, Wisconsin, Oklahoma and California are deliberating the future role of nuclear energy in their respective energy policies.

At the same time, a global economic crisis is weighing on all the major economies and industries.

You see it in your income statements, in a growing backlog of customer payments from those hardest hit by the downturn and in the cost of raising capital for new energy projects.

Even considering the impact of the recession, the U.S. Energy Information Administration projects that the U.S. economy will begin a slow recovery in 2010 with a modest 1.9 percent increase in gross domestic product and a 1.2 percent increase in total electricity consumption.¹ That won’t be enough to offset the projected declines in both areas this year, but it’s moving in the right direction.

Worldwide, the International Energy Agency last week reported that the global surge in the use of consumer electronics such as flat screen TVs, iPods and mobile phones will triple electricity consumption by 2030 to 1,700 terawat-hours.

Although forecasts vary somewhat, all of them suggest that the economic decline has slowed and that a turnaround—probably a long, slow turnaround—will start sometime in the not too distant future.

In the midst of these political and economic changes, the importance of nuclear energy to our electric generation portfolio and our environment is more significant than ever. The industry is investing in the future—and we continue to take the long view in everything we do, including the possibilities of using nuclear power to charge plug-in electric hybrid vehicles or generate process heat for use in industrial processes or the generation of hydrogen.

One critical element of our long-term planning is navigating changes in political leadership here in Washington.

Nuclear energy continues to enjoy bipartisan support in Congress, and we continue our outreach efforts to maintain and expand that base of support. This is absolutely essential. It includes building relationships with the leadership and those who are new to Capitol Hill and reaching out to those members of Congress whose position on nuclear energy is not well defined—or may be reshaped based on emerging issues such as climate change and jobs creation.

A few weeks ago, NEI sponsored a bipartisan briefing for
23 House members that was co-hosted by Majority Whip James Clyburn and Congressmen John Spratt and Zach Wamp, who lead the House Nuclear Issues Working Group. Speakers from industry, the environmental community, organized labor and a moderate Democratic think tank briefed the members on various aspects of our industry ahead of energy and climate change policy discussions in the House.

Working with national and state-based coalitions in states such as New York, Vermont, Pennsylvania, Texas and New Jersey and alliances with organizations of all stripes, we are broadening the base of support for nuclear energy. Importantly, these organizations are communicating this support to their members of Congress and state leaders on a regular basis.

We’ve briefed new members of Congress and the new leadership during the first months of this 111th Congress. Given the performance of today’s nuclear energy facilities—as reported by Gary—and the widely recognized role of nuclear energy in our nation’s energy and climate change policy, our industry is well positioned among many in Congress.

But we still have a great deal of work to do and we are looking to mobilize your participation in this education and advocacy effort.

For example, during the course of this meeting, representatives of our member companies will be meeting with their congressional leaders as well as the Congressional Black Caucus and moderate Democrats. Last week, Patrick Moore of the Clean and Safe Energy Coalition briefed the vice chair of the Congressional Black Caucus and other members of Congress … and he met with the executive director of the National Black Caucus of State Legislators.

Jeff Archie, the vice president for operations at SCANA, briefed that group of African-American state legislators on nuclear issues last weekend at its spring policy forum. And we’re already planning a follow-up briefing for the organization’s annual legislative conference this summer in Philadelphia.

This is the kind of sustained effort we need to replicate on a regular basis from all segments of our industry … and those organizations that support the industry.

NEI works closely with your companies to represent the nuclear industry’s policy interests in Washington and outside the beltway. Your success in operating nuclear plants safely, reliably and efficiently is the foundation of our public and political support. Nothing is more important to this industry than safe, reliable plant operation.

Earlier this morning, Gary briefed us on the status of new nuclear plant development.

The quest for new energy supplies and the growing concern about climate change makes it clear that nuclear energy and other low-carbon electric generation sources are needed worldwide to meet both goals.

More than 40 nuclear plants are under construction around the world, including advanced reactor designs that U.S. companies contemplate building two or three years from now. About half of these projects have startup dates ranging from this year to 2016.

Given our nation’s growing need for energy and concern about carbon emissions, there is no question that we will build more nuclear plants. We are developing new nuclear projects at a time when the public and policymakers are charmed by the allure of renewable energy sources. Public favorability of wind and solar is in the 90 percent range and we’ve all seen the proliferation of renewable portfolio standards in state energy policy.

To be sure, renewable energy sources have a role to play in our electricity portfolio. But to quote an excellent op-ed published last month in The Washington Post by former Energy Secretary James Schlesinger and energy analyst Robert Hirsch, “some serious realism in energy planning is needed.”

Increased energy efficiency will play an important role in managing load growth and electricity demand. But even with smaller projected increases in electricity demand tied to slower economic growth, the United States still will need about 20 percent more generating capacity by 2030.

The Electric Power Research Institute examined measures that are technically feasible for reducing carbon dioxide emissions, assuming there are no economic or policy constraints. It identified a mix of advanced technologies that could reduce CO2 emissions 45 percent by 2030.

To achieve that goal, nuclear energy’s share of electric generation must increase to 25 percent, or by 64 gigawatts. In addition, full carbon capture and sequestration technology must be commercially available by 2020 and electricity from renewables must increase from 3 percent to 6.7 percent nationwide.

The Environmental Protection Agency’s recent analysis of the Waxman-Markey climate change bill forecasts the need for 180 new nuclear power plants to meet the carbon reduction goals by 2050.

All credible analyses of our energy and climate policy recognize the need to expand the use of nuclear energy. We all know there are significant challenges that we must overcome to do so. But this industry can and will meet those challenges.

America’s electric power industry is on the verge of a historic transformation. Just as we must rebuild our transportation infrastructure, so also are rebuilding our energy infrastructure— replacing older inefficient power plants with more efficient, cleaner technologies; deploying new technologies to improve efficiency; modernizing our electric grid; and reducing greenhouse gas emissions.

The 104 nuclear power plants across the United States represent three-quarters of our carbon-free electricity. Of the emission-free supply sources, nuclear energy clearly has the most potential for large-scale expansion.

However. The electric industry faces an unprecedented challenge. It must invest as much as $2 trillion in new power plants, transmission and distribution systems, and environmental controls to meet the 20-25 percent increase in electricity demand by 2030.

The pace of clean technology deployment is largely dictated by the ability to secure financing—a challenge at the best of times, but even more so in today’s tight credit markets.

Addressing this financing challenge will require innovative approaches to financing.

Simply put, some companies cannot build nuclear plants without federal and/or state support.

This need is being recognized in U.S. government policies and practices that support the development of clean energy technology, including nuclear energy, through limited financial incentives made available by the Energy Policy Act of 2005. A number of states where nuclear plants are proposed have put in place legislation or regulations, or both, to help companies secure financing for nuclear plant construction and to recover costs during construction.

However, we believe the times demand a new federal financing corporation —a Clean Energy Development Bank—modeled on the U.S. Export-Import Bank, with sufficient financing capability to ensure that capital flows to clean technology deployment—renewables, advanced coal-based systems, nuclear and other clean fuels—in the electric sector.

Senators Jeff Bingaman and Lisa Murkowski deserve great credit for having recognized this imperative.

Bipartisan legislation to create a Clean Energy Deployment Administration was approved by that committee two weeks ago, and, as we meet this week, companion legislation has been introduced in the House.

If it is sound public policy to support export of U.S. goods and services through Ex-Im Bank, surely it is also good public policy to support deployment of clean energy infrastructure and creation of green jobs in the United States. These innovative financing mechanisms also will help moderate the impact of future electricity costs on consumers.

Looking at the financing platforms available to the industry today, implementation of the loan guarantee program remains challenging. But we are committed to addressing these challenges—either with new regulations or legislation.

And we still expect DOE will execute conditional commitments with the four lead projects by year’s end.

Nuclear energy is a capital-intensive technology, but we believe that new nuclear plants will be competitive despite this large capital investment. As you know, capital cost is certainly the most important factor in financing, but it is not the sole determinant of a plant’s competitive position.

The key factor is the cost of electricity from the plant at the time it starts commercial operation relative to the other alternatives available at that time. Based on NEI’s modeling … on the financial analyses performed by companies developing new nuclear projects … and on independent analysis by others, new nuclear capacity will be competitive with the alternatives available.

As our industry moves forward with new reactor development, NEI is working with our members on a broad range of issues to be sure the first wave of advanced nuclear plants is successful. This work spans regulatory, legislative, public affairs, project management and construction management disciplines.

Between the issuance of a combined construction and operating license and the start of operation lies an enormous amount of work that requires rigorous management to ensure high-quality construction, on schedule and within budget.

In addition to an improved NRC licensing process, the next generation of nuclear plants built in the United States will benefit from an industry-wide inventory of lessons learned. The roadmap for success includes:

• industry coordination on licensing and pre-construction preparation by reactor design-centered working groups,
• a focus on quality assurance and corrective action programs for new plant construction, and
• managing the process to implement the inspections, tests, analyses and acceptance criteria that the NRC will use to determine whether the plant is ready to operate safely once construction is completed.

Since the November elections, many people I’ve spoken with have questioned our industry’s growth potential based on perceived opposition or indifference toward nuclear energy by the Obama Administration and some congressional leaders.

To be honest, I believe the administration, rightly, has been focused on issues like the filling cabinet and agency positions, the economy and international relations.

The administration is committed to a national energy and climate change policy, but it is yielding to Congress in the development of this policy. I do believe that this administration has a measured position on nuclear energy, but it is a position that is evolving.

Remember that during the presidential campaign we witnessed a significant shift among Democratic candidates on nuclear energy. Most supported a role for nuclear energy—with some familiar caveats. Even so, it was a sea change from previous elections.

On nuclear energy, the Obama administration’s actions during his first 100 days in office have been focused on developing the fiscal year 2010 budget—directing significant funding toward next-generation reactor technology and used fuel recycling.

The President has said—quote—“we must harness the power of nuclear energy on behalf of our efforts to combat climate change and to advance opportunity for all people.”

Similarly, others in the administration are talking about the essential role that nuclear energy must play in our energy and environmental policy. And they’re taking action.

Energy Secretary Chu in January told the Senate Energy and Natural Resources Committee that moving the loan guarantee process forward is one of his most important goals. In a matter of months, the Obama administration accomplished more progress toward implementation of loan guarantees for nuclear energy projects than the previous administration had in the past year.

Similarly, Deputy Secretary of Energy Dan Poneman and Undersecretary-designate Kristina Johnson have testified before the Senate on the importance of nuclear energy to the nation’s energy and climate change policies.

I believe that the administration understands and appreciates the value of nuclear energy to our country. I would like to see more passion, coupled with positive support for our industry … and I believe it will come as we and our supporters in the states and in Congress make more clear the value of nuclear energy to meeting the President’s energy and environmental goals becomes.

We all know that that President Obama also has kept his political promise to Majority Leader Harry Reid to slow work, and ultimately terminate, the Yucca Mountain project.

That decision has prompted criticism not only from our industry, but also from members of Congress, state leaders, think tanks and editorial pages. Nonetheless, the administration will do no more than maintain the license application for Yucca Mountain at the Nuclear Regulatory Commission and begin assembling a blue ribbon commission to examine the alternatives to used fuel management.

NEI has sent the administration and congressional leaders a set of principles that we believe should guide the work of the commission and we have suggested qualified experts from academia, state government, industry, labor and public interest groups to serve on the commission.

Among our recommendations, we believe that the fee paid into the Nuclear Waste Fund by consumers of electricity from nuclear plants should be eliminated until the administration proposes its new program. Given the 22 billion dollar balance in the fund, the interest earned on that money alone covers many times the FY2010 budget request by the Department of Energy for the Yucca Mountain program. There is no need to tax consumers to cover the cost of the federal government’s current repository program.

Consistent with our industry’s policy on used fuel management, we believe that the commission should consider a national policy that includes:

• centralized temporary storage at a few locations, preferably hosted by communities that volunteer for these facilities;
• development and deployment of advanced technology for recycling used fuel;
• and ultimately, a geologic disposal facility for the byproducts of recycling and for material that cannot be recycled.

Our industry made this policy shift two years ago, recognizing that centralized interim storage is an essential policy bridge to closing the fuel cycle.

The panel should conduct a thorough, impartial assessment of the government’s approach to radioactive waste management … review the existing research to determine its consistency with international standards … and develop a sustainable strategy for managing used nuclear fuel.

Scientific reality should underpin the panel’s work.

In the meantime, the NRC should continue its review of DOE’s Yucca Mountain license application. Completing the NRC review will provide valuable insights into licensing a geologic repository.

On the other end of Pennsylvania Avenue, our industry has been able to bridge the partisan divide and generate broad support for nuclear energy. There are new champions among the Democratic and Republican leadership for our industry—leaders who recognize that we need all low-carbon sources of electricity and that nuclear energy is foundational to U.S. energy security.

Our industry has a focused legislative and policy agenda this year and we are working with both Democrats and Republicans to build support for our priorities, which include:

• Limited changes in law or administratively to the DOE loan guarantee program to correct difficulties in the current program;
• Appropriation for additional loan guarantee volume to supplement the $20.5 billion provided for in the 2005 Energy Policy Act;
• The development of innovative financing platforms for electricity system expansion, such as the Clean Energy Deployment Administration;
• Full funding from DOE to complete the Nuclear Power 2010 program;
• Tax-related incentives for nuclear supply chain and nuclear workforce development; and
• A new and sustainable used nuclear fuel management policy that recognizes the blue ribbon commission’s review and, if needed, includes changes the Nuclear Waste Policy Act.

We are working with our membership to address all of these issues as well as build a strong base of support for nuclear energy in Congress. The fact that our facilities safely produce large amounts of electricity without producing greenhouse gases and that our industry is creating thousands of high-paying green jobs positions us well on Capitol Hill.

I mentioned earlier that 23 members of Congress joined leaders from our industry, the environmental community and labor for a briefing on nuclear energy issues at the Library of Congress.

At the briefing, Majority Whip James Clyburn told the standing-room only crowd that he had recently discussed the significance of nuclear energy with President Obama and Speaker of the House Pelosi. Conversations on our issues at that leadership level—including the support of Majority Leader Hoyer—are continuing.

Just last week, moderate Democrats released a renewable energy portfolio policy that clearly included nuclear energy, among a diverse mix of electricity sources.

And Democratic and Republican leaders from the House and Senate, respectively, have asked Energy Secretary Chu to resolve the remaining issues with loan guarantee program to assure that the program functions as designed.

Addressing our key policy and regulatory issues will require a unified industry effort. These priorities, as well as those associated with maintaining the excellent performance of the current plants, may become even tougher in light of demographic changes taking place in our industry and related communities.

We have seen substantial turnover within our industry, with about half of the industry’s chief nuclear officers changing during the past few years. NRC management ranks in the past few years also reflect that rate of change. Many new employees are coming on board at the NRC and throughout our industry. That’s terrific in terms of industry growth, but it does increase the pressure on efforts to transfer knowledge and groom new leadership

Transferring knowledge is absolutely necessary, but an insufficient condition for creating new leadership capable of maintaining continuity in essential regulatory and technical programs. Much of what we accomplish in this industry—or any other—hinges on effective relationships and open communications.

That leads me back to a topic I introduced at the beginning of my remarks: The need for industry executives—CEOs, chief nuclear officers, plant managers and others—to be directly, personally involved in outreach to policymakers.

I realize there are exhaustive demands on your time. And I know nuclear energy is far from the only issue you manage at your companies. This is all the more reason that we need to leverage industry resources to the greatest extent possible.

I have just one request of you today.

Reach out to your representatives in Congress and your state and local leaders on a regular basis. They need to hear from you. They need to hear from all segments of the industry … from vendors and suppliers … from universities that are preparing our future workforce … and from our partners in organized labor.

Enhancing policymaker support for nuclear energy is essential. Adding your individual voice to industry outreach activities is extremely important and immeasurably valuable.

We are at a pivotal time both in our industry and in the evolution of energy and climate policy. Because of the safe and reliable operation of our existing nuclear energy facilities, we have a tremendous opportunity to establish the business and policy foundation for expansion of the nuclear energy industry in the United States and abroad. Nuclear energy must be part of a solution that ensures there is affordable electricity for the benefit of all people.

The NEI members have been working well together to maximize the value of our current nuclear energy facilities and to set the stage for the future contributions of this industry to mankind—contributions that will extend beyond the production of electricity.

We need to build on that success by enhancing our coordination and integrating our resources to garner broad support for nuclear energy and our industry’s policy goals.

Let’s work together to make it a reality.

Thank you.

¹ EIA Short-Term Energy Outlook, March 10, 2009.